Free Benefit Of Big Data To Businesses Research Paper Sample
Although it is not new to create the value of businesses using the data collected, the effective use of business-oriented data is proving to be the basis of business competition. Today businesses are making use of data/information they gather to derive insights with an aim of making better, smart as well as real time and fact-based business decisions. This demand for deeper knowledge has created the necessity of the big data tools in businesses. This paper will focus on big data and the benefits that businesses are likely to derive from the use of big data in their decision-making processes.
What is Big Data?
Big Data is a dynamic, large as well as distinct volumes of data made by people and machines. Big Data require new and innovative as well as scalable technology in collecting, hosting and analyzing the data collected. The aim is to get the real-time business insights relating to consumers, business risks, possible profits, business performance, productivity as well as improved shareholders value.
Analysis of data in an intelligent and complicated manner might make small data to appear as if they are big. All data exceeding the current ability of processing are considered as "big". To illustrate the importance of Big Data, president Obama announced a "big data" initiative. Moreover, there are many different programs concerning big data that are being launched around the world. For instance, Walmart handles approximately one million transactions per hour; this is imported into the company’s databases. The database for the company is estimated to hold a data of 2.5 petabytes. Another example is facebook that contain 40 billion photos from its subscribers.
Big Data is created from the information collected from the social media, data from other devices such as smartphones and tablets, which are internet-enabled, machine data, voice and video records and preservation of both structured and unstructured data. Big Data is usually characterized by use of four "Vs". The four "Vs" include; volume -- which is the amount created data. The data created in Big Data is typically vast when compared to traditional data. Variety -- people and machines make use of many different sources when creating the Big Data. Velocity-- data is generated at extremely high speed and never stops. Veracity -- many sources are used in the creation of data. Therefore, one needs to test the credibility of these sources, (SAS, 2011).
Because of dynamism in technology, there is need to extend the use of data-driven results to all areas in organizations. Although there is quick and sophisticated advancement in software as well as hardware, technology cannot be the only determinant. Therefore, success in companies will only be realized when people, processes, data and technology are integrated. This means that data is incorporated in all business routines, strategies as well as company’s daily operations. To make proper strategic and operational decisions, organizations are required to understand the insights that they need. Essentially, organizations must sort the available data so that they will be able to identify the trends in the data as well as correlations that will guide proper changes in their business behavior so that they can implement beneficial changes. The other thing that an organization require to do is to enrich specific organizational information with the information generated from the external sources.
In successful businesses where there are constant and rapid changes, predictions are important and such businesses cannot depend on speculations or visualizations. To have effective future predictions, there must be proper data analysis using proper techniques that will enhance company’s strategy. The Big Data collection and aggregation enable organizations to have effective analytic capacity.
The value of big data is not just having it. It includes harvesting this big data for fast as well as reality-based decisions leading to the real business value. For instance, it was possible to prevent disasters such as financial crisis, mortgage crisis and others by use of risk computation using previously collected historical data and taking it to a massive scale. The major challenges facing the use of big data include; understanding and being able to utilize the Big Data. Each company in a particular industry must be able to understand specific big data important for them. There is always emergence of new technology required to be able to make effective use of big data, privacy issues because of availability of more personal data and the need to have qualified personnel to manage the big data for specific industry (Frank, 2012).
Benefits of Big Data to Businesses
Businesses can benefit from use of big data in many ways especially in areas of the Customer Insights, Marketing, Operations as well as the areas of Risk Management. When businesses are effective and efficient in collecting, processing as well as analyzing the big data, they are able to achieve a complete understanding of their business. They do not only understand their business but rather they are able to have clear understanding of their customers, their products, their competitors and many other business parameters. This will help organizations to improve their efficiencies, increase their sales, lower the cost of doing business, improve their customer service delivery and improve the products or services that they provide to their customers.
Using target marketing through the social trends, organizations can be able to make accurate insights and customer segmentation. Therefore, they will be able to develop their customer driven marketing by use of big data. This is possible because organizations can be able to observe individual customers behavior and therefore develop promotions and personalized offers to reach specific customer segment. Using the big data, companies can be able to make real-time decisions and detect possible customer churn. This will help the company to model the appropriate marketing mix. The company can be able to identify the most effective marketing mix and promotions option. Moreover, the use of big data can help organizations in optimizing the prices of their products by assessing the product’s demand sensitivity to pricing.
According to Frank 2012, firms can use big data to store their customer’s activity analysis such as their preferences. Monitoring the social media can help businesses in analyzing their customer sentiments towards the supplied products or services. Businesses can be able to make use of big data to improve on their planning and forecasting depending on historical data collected and analyzed. Moreover, when businesses handle large customer transactions, they can be able to analyze this data and detect possible real-time frauds (Nair & Narayanan, 2012).
Example of benefits of big data is when manufacturing companies make use sensors in their products, aimed at returning streams of telemetry; sensors are able to reveal the patterns of usage of their products, the rate of failure as well as other opportunities that can help these companies to improve their products. This will help the company to reduce their development as well as assembly costs. Another example is proliferation of smart phones and tablets. These devices provide advertisers with good opportunities to target customers when they reach close to certain stores such as coffee house, groceries or restaurants. This platform is effective because it provide new revenues to the service providers while offering businesses with unique chances to reach new customers.
When businesses make use of the social media as well as the web log files in their ecommerce sites, they can be able to know the customers who buy their products or services and who did not. Therefore, in this case businesses are able to create effective customer segmentation and develop appropriate marketing campaigns based on facts. This can also help them in improving the efficiency of their supply chain. Other examples include use of information technology logs to detect security breaches and therefore prevent the future occurrence of similar breach. Voluminous call center can be used to improve the business-to-customer interaction and improving the customer satisfaction (Frank, 2012).
What really surprised me?
I realized that big data does not only apply to helping the growth in organizations--to improve businesses operations using big data, it goes further to socially significant fields. For instance, big data could have enabled us to foresee the mortgage meltdown. It could have helped us to control financial institution crisis as well as the economic recession. It means that big data combined with big data analytics could help us trim money lost in fraud government and financial markets operations. Therefore, it means that we could improve and easily control the quality as well as the cost of our health care to help us save more lives.
As a student, I see that for any organization to become competitive and efficient, they have to have close look at related risks, integrate more sources of data, make use of better tools to have real-time analysis and be able to increase the volume of the data collected.
Franks, Bill. Taming the Big Data Tidal Wave: Finding Opportunities in Huge Data Streams with Advanced Analytics. Hoboken, N.J.: Wiley, 2012. Print.
Nair, R., & Narayanan, A. Benefitting from Big Data Leveraging Unstructured Data Capabilities for Competitive Advantage: Data and Technology Perspective. Booz & Company, 2012
SAS. "Big Data Meets Big Data Analytics: Three Key Technologies for Extracting Real-Time Business Value from the Big Data That Threatens to Overwhelm Traditional Computing Architectures". 2011. http://www.sas.com/content/dam/SAS/en_us/doc/whitepaper1/big-data-meets-big-data-analytics-105777.pdf. Accessed April 4, 2015
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